Roc to weigh takeover offers as Horizon merger deal advances

7/11/2014

Roc to weigh takeover offers as Horizon merger deal advances

JAMES PATON

SYDNEY (Bloomberg) -- Roc Oil Co., the Australian explorer planning to combine with Horizon Oil Ltd. to create an A$800 million ($751 million) company, said it will consider whether two takeover offers it received are genuine.

“We have to make sure we’re not walking away from value,” Roc CEO Alan Linn said today, July 11, in an interview in Sydney. “It’s important to see whether they are genuine bidders, so we’ll do what we need to do to capture maximum value, whether that’s through a merger or a takeover.”

Roc, which rose the most in two weeks in Sydney trading today, said yesterday it had received a second acquisition proposal following a separate approach last month. The two takeover bids from the unidentified companies may complicate the April agreement between Horizon and Roc to merge oil and gas operations stretching from China to Malaysia.

The second acquisition offer increases the chance that the Horizon deal won’t go ahead as planned, Adam Martin and Stuart Baker, analysts at Morgan Stanley in Melbourne, said today in a report. It’s plausible that a private equity firm is seriously assessing Roc, according to their report.

Roc shareholders rejected a proposal by the largest investor, Allan Gray Australia Pty, to force the company to give them a vote on the Horizon deal, Roc said today. Allan Gray, whose resolution needed 75% approval, has argued it’s unfair only Horizon investors get to vote on the accord.

“Fairly soon we’ll know what’s best for shareholders,” Linn said, declining to give any details about the two suitors. The approaches “may or may not become something. We don’t know. What we do know is the merger will continue,” he said.